Paul A. Baran - Life and Work

Life and Work

Baran was born in Imperial Russia. His father, a Menshevik, left Russia for Vilna (then Poland) in 1917. From Vilna the Baran family moved to Berlin, and then, in 1915 back to Moscow, but Paul stayed in Germany to finish his secondary school. In 1926 he attended the Plekhanov Institute in Moscow. He left again for Germany to be an assistant on agricultural research with his advisor. Baran remained in German associated with the Frankfurt School Institute for Social Research. He next wrote a dissertation under Emile Lederer on economic planning. He met Rudolf Hilferding, author of Finance Capital and wrote under the pen name of Alexander Gabriel for the German Social Democratic Party journal "Die Gesellschaft."

After the Nazi regime took power, Baran fled to Paris and then back to the USSR, and then to Vilna, (then in Poland). With the Molotov-Ribbentrop Pact and just before the Nazi invasion of Poland he emigrated to the US, where he enrolled at Harvard and received a Masters degree. Short of funds, he left the PhD program and worked for the Brookings Institution and then for the Office of Price Administration and then the Office of Strategic Services. He worked under John Kenneth Galbraith at the Strategic Bombing Survey traveling to post-war Germany and Japan. Baran then worked for the United States Department of Commerce and lectured at George Washington University. He then worked for the Federal Reserve Bank of New York before resigning to join academia.

He married Elena Djatschenko, had a son Nicholas but soon divorced. Baran had his academic career in the United States, teaching at Stanford University from 1949. From 1949, he was an active participant in the formulation of editorial ideas and opinions in Monthly Review magazine edited by Paul Sweezy and Leo Huberman. Baran visited Cuba in 1960 along with Sweezy and Huberman, and was greatly inspired. In 1962 he revisited Moscow, Iran, and Yugoslavia. In his last years he worked on Monopoly Capital with Sweezy. He died before it was completed by Sweezy. Baran died from a heart attack in 1964. He is sometimes associated with the Neo-Marxian school of thought.

Baran introduced the concept of "economic surplus" to deal with novel complexities raised by the dominance of monopoly capital. With Paul Sweezy, Baran elaborated the importance of this innovation, its consistency with Marx's labor concept of value, and supplementary relation to Marx's category of surplus value.

The actual surplus is the difference between what the society produces and its actual current consumption. The potential surplus is the difference between a society's actual output and what could be produced, given an improved social organization. Even the actual surplus is hard to measure, given that most econometrics is oriented toward capitalist goals. The potential surplus, as Baran admits, is even more speculative, given its dependence on a model of a non-existent (say genuinely socialist in the Marxian sense) production system.

Baran used the surplus concept to analyze underdeveloped economies (or what are now more optimistically called "developing economies") in his The Political Economy of Growth. Baran with Paul M. Sweezy applied the surplus concept to the contemporary US economy in Monopoly Capital.